Referral of DESNZ's Proposed £46.5M Subsidy to ITM Power UK Ltd

Referral of the Department for Energy Security and Net Zero’s Proposed Subsidy to ITM Power UK Ltd

The Subsidy Advice Unit (SAU) has accepted a request for a report providing advice to the Department for Energy Security and Net Zero (DESNZ) concerning its proposed subsidy to ITM Power UK Ltd.

From: Competition and Markets Authority Published 14 April 2026 Case type: SAU referral Case state: Open Market sector: Energy Opened: 13 April 2026

Administrative timetable

Request from DESNZ

13 April 2026: The SAU has accepted a request for a report from DESNZ concerning the proposed subsidy to ITM Power UK Ltd. This request relates to a Subsidy of Particular Interest.

The SAU will prepare a report, which will provide an evaluation of DESNZ’s assessment of whether the subsidy complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.

Information about the subsidy provided by DESNZ

The Department for Energy Security and Net Zero (DESNZ) is proposing a subsidy which aims to support the expansion of UK electrolyser manufacturing capacity to support and facilitate low carbon hydrogen production. The beneficiary, ITM Power UK Ltd, is a UK based electrolyser manufacturer headquartered in Sheffield. The subsidy takes the form of a £46.5 million capital grant, paid over financial years 2026–27 and 2027–28. The policy objectives are to support delivery of the UK’s climate targets; strengthen energy security by reducing reliance on imported electrolysers; and to support regional economic growth through skilled employment in Sheffield.

The subsidy will support eligible capital expenditure for the construction and fit-out of a new 1GW manufacturing facility in Sheffield for ITM Power UK Ltd’s next-generation electrolysers and will be paid in arrears against milestones and evidence of spend. The subsidy award will be governed by a Grant Funding Agreement (GFA) between DESNZ and ITM Power UK Ltd. The GFA will be prescriptive about the use of the subsidy, and the achievement of outputs which will be closely monitored during delivery.

The project is expected to create hundreds of new skilled jobs in the local area and to support the development of the UK’s wider hydrogen supply-chain.

Information for third parties

If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning the proposed subsidy to ITM Power UK Ltd, please send your comments on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Please send your submissions to us at sau-itmpower2026@cma.gov.uk, copying the public authority: h2.ccussectordevelopment@energysecurity.gov.uk

Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).

Notes to third parties wishing to make a submission

The SAU will only take your submission into account if it can be shared with DESNZ. The SAU will send a copy of your submission to DESNZ together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with DESNZ using the email address provided above.

The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.

For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Contacts

• SAU project team: sau-itmpower2026@cma.gov.uk
• CMA press team: 020 3738 6460 or press@cma.gov.uk Published 14 April 2026 Contents